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Grady County salary overpayments could create accounting nightmare

CHICKASHA — The state audit is over, but the accounting nightmare is likely just beginning for 13 current and former Grady County elected officials who were found to have been overpaid by a combined $727,343 over a 10-year period.

"To undo it ... would be quite complicated," said Oklahoma State Auditor and Inspector Gary Jones.

Some of the Grady County officials also could potentially face criminal charges, although that is yet to be determined.

State prosecutors, the IRS, Social Security officials and state pension administrators all may be called upon to help untangle the mess before the situation is resolved, officials said. Private attorneys and accountants also may become involved as Grady County officials seek out legal and financial advice to guide them through the quagmire.

At first blush, the solution might sound easy. The 13 officials were paid more than the law allowed so why not just have them pay the money back?

If only it were that simple.

The first problem is the sheer amount of the overpayments.

Three of the current and former officials each received $90,959 in salary overpayments and the other 10 were overpaid by amounts ranging from $4,987 to $85,972.

Not everyone is likely to have that kind of money just sitting around, noted Grady County Sheriff Jim Weir, who has been in office about six years.

"Whatever the figure they come up with, if I was overpaid over six years, I expect them to give me six years to pay it back," said Weir, who was overpaid by $81,402 according to auditors. "I don't think it would be fair for them to come in tomorrow and say, 'OK, we finished the investigation. Here's your bill. Pay it.'"

Weir, whose wife is an accountant, also pointed out that just because auditors determined the elected officials were overpaid by specific amounts doesn't mean all that money was included in their take-home pay.

State and federal income tax withholding payments, Social Security taxes, Medicare taxes and pension contributions are among the funds that would have been withheld from paychecks based on the amounts the elected officials earned. The county also made benefit contributions based on the inflated salaries.

"I didn't end up with an extra $81,000 sitting in my pocket over those six years," Weir said. "My wife's figured out that maybe we ended up with half of that you could say we got to spend the way we wanted to."

Weir pointed out that the income taxes that the county officials paid were based on their inflated salaries and that getting part of that money back is problematic.

"I can only do an amended return for the last three years," Weir said.

Pension and Social Security contributions and benefits also will create a huge accounting problem.

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The county and elected officials paid excessive amounts into those funds based on the inflated salaries and some officials already have retired and have been receiving excessive benefit payments.

Obligation to get it correct

Joseph Fox, executive director of the Oklahoma Public Employees Retirement System, said he believes his agency will be required to refund any excessive pension contributions that have been made and recover any excessive retirement benefits that have been paid out.

"We have an obligation to get it correct," Fox said. "I can't think of any other situation where I've seen that happen."

Fox said his agency's experience with overpayments has generally been limited to situations where a person dies and the retirement system isn't notified immediately so benefit checks continue to be sent to the person's account. Recovering those funds is less complicated.

Weir said he finds the situation extremely frustrating because he had no say in how his salary was established. The sheriff said he once tried to give some of his salary back so that his deputies could be paid more but was told that wasn't possible.

In the end, Weir indicated he is prepared to return any money he shouldn't have received but wants to make sure all factors are taken into consideration.

"I'm prepared to do what's right by the law," Weir said. "I've been in law enforcement over 40 years now. I follow the law."

Placing blame

Criminal charges against some of the officials remains a possibility, but Grady County District Attorney Jason Hicks said he likely will leave that decision up to Oklahoma Attorney General Mike Hunter, the state's multicounty grand jury or another district attorney chosen by Hunter.

Hicks said his office's representation of county officials on various legal matters could create a conflict of interest if he were to retain the case.

State auditors blamed past boards of Grady County Commissioners for much of the overpayment fiasco.

Salaries of elected county officials are supposed to be set in accordance with a complicated formula that determines the maximum and minimum salaries allowed based on factors that include population and property values within the county, auditors reported.

From July 1, 2008, through July 31, 2018, commissioners failed to follow a state law that requires commissioners to set salaries annually for county elected officials based on that formula, auditors said.

Instead, commissioners and other elected officials received salaries and raises approved by the Grady County Excise Board without commissioners voting on them, auditors said.

Auditors noted the overpayments began after officials ignored the advice of an assistant district attorney in 2008 that they should not share in large salary increases handed out to county employees that year.

"Contrary to the advice of the assistant district attorney, a salary increase of 18 percent approved for employees was also given to the county officials," auditors said.

The advice was given at an August 2008 excise board meeting that was attended by individuals who were then District 1 and District 3 county commissioners, county assessor, county treasurer, county clerk, court clerk and county sheriff.

The assistant district attorney told them the advice was based on a review of statutes and a consultation with the state auditor's office.

The payroll clerk told auditors she was instructed by the county clerk to add the percentage of salary increase approved for employees to all individuals in the payroll software system.

Randy Ellis

For the past 30 years, staff writer Randy Ellis has exposed public corruption and government mismanagement in news articles. Ellis has investigated problems in Oklahoma's higher education institutions and wrote stories that ultimately led to two...
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